Calls for reform amid rising rent defaults
TDT | Manama
Email: mail@newsofbahrain.com
A growing concern about the defaults of tenant rents is one that is driving calls for far-reaching reform within Bahrain’s real estate sector.
Real estate experts are calling for a fully integrated online system that will allow landlords to do a background check on prospective tenants before signing any rental contract with them.
This, they say, is the only way around the growing issue of rent arrears that is destabilising the market and affecting the national economy.
The proposal mirrors similar systems already in place in other countries, such as Saudi Arabia’s “Ejar” platform, designed to streamline the landlord-tenant relationship.
Platform
Experts stress that such a platform would enhance transparency and deter fraudulent behaviour.
“The issue of tenants delaying or failing to pay rent is a major concern threatening the stability of the local real estate market and negatively impacting the national economy,” stated Nasser Al Ahli, a real estate expert and head of the Real Estate Committee at the Bahrain Businessmen’s Association.
Al Ahli highlighted the increasing number of court cases and complaints from landlords as evidence of the problem’s severity, impacting residential, commercial, industrial, and administrative sectors, with the residential sector being the most affected due to high demand and diverse tenant profiles.
Consequences
“The consequences of these defaults are far-reaching. Landlords are withdrawing from the market, leading to a decline in related activities such as construction, real estate brokerage, and building materials. The government also loses revenue from rental fees (currently 10%), and both local and regional investors are pulling out, deterring new investment,” Al Ahli warned, suggesting creating a specialised department within the courts or municipalities to verify tenant backgrounds, similar to bank credit checks facilitated by companies like Benefit.
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